July 30--When his wife's hand swelled up after an insect bite last month, disabled Houston resident Charles Alongi did the prudent thing: He took her to the nearest hospital emergency room.
In and out in record time, the Alongis were feeling good about the appointment until they got the bill for the five minutes the doctor spent with them, two pain killers and hand wrapping: $800.
The bill is a fraction of the $17.3 billionTexas hospitals charge annually to treat the uninsured. Those bills, Health and Human Services Commissioner Thomas Suehs told a Texas House committee this month, are passed on to all Texans.
"We're not debating whether somebody gets health care in this state, we're debating how you pay for it," Suehs said. "Either you are going to pay for it through the Medicaid program or private insurance through subsidies or you're going to pay for it through local tax dollars."
Gov. Rick Perry's announcement this month that Texas won't participate in the Affordable Care Act Medicaid expansion may have seemed to settle the issue, but instead it's launched a debate about whether expanded Medicaid or the status quo is the least costly path.
With the expansion, Suehs said, Texas would receive $100 billion of Medicaid funding from the federal government over 10 years and would have to put up $15.5 billion in that time, most of it in the latter part of the decade.
That might seem like a good deal, but Suehs told legislators that he, like Perry, opposes participation in the expansion because Medicaid is "broken" and already consumes too much of the state budget -- 25 percent. It pays for the care of one in four children, more than half of childbirths and half of nursing home costs.
Perry and Suehs call for the federal government to provide block grants that allow states to develop programs that fit their needs.
But skeptics say Texas' track record doesn't inspire confidence. Senate hopeful Ted Cruz said in a debate last week, for instance, that it's "the individual's job to provide health care for themselves and their family" and that providing emergency care would be cheaper than expanding Medicaid rolls.
In the meantime, insured Texans are subsidizing the uninsured through higher premiums, what Family USA calls "the hidden health tax." Kathleen Stoll, the author of Family USA's 2009 report on the phenomenon, said the extra amount Texans pay in employer-based coverage is close to double the national average because so many Texans are uninsured.
One expert said he doesn't expect Perry's decision to last.
"After the headlines go away, every hospital in Texas is going to call up Perry and say, 'Tell us why we're not taking money from the federal government to offset our uncompensated care costs,' " said Thomas Carroll, a health-care analyst for the investment firm Stifel Nicolaus. "That's the question that Perry and the state won't be able to answer."
Carroll says participating in the Medicaid expansion would generate nearly $1 billion in annual Texas revenue for Amerigroup/WellPoint, the state's largest Medicaid managed care group.
The burden of paying for the uninsured's health care also falls largely on county residents, whose property taxes support safety-net public institutions such as the Harris County Hospital District. The district last year spent roughly $675 million caring for the uninsured.
Many public hospital officials have slammed Perry for his decision.
Daniel Haggerty, the El Paso County Hospital District's lone Republican commissioner, told The New York Times that Perry "hasn't got a clue as to what our situation is and what our problems are."
Houston officials have been more temperate. David Lopez, president of the Harris County Hospital District, said additional Medicaid funding "would have been nice, but the governor's decision does not change our basic strategy. The sky's not falling."
Memorial Hermann Hospital Healthcare System CEO Dan Wolterman declined to comment.
Perry's decision not to participate in the Medicaid expansion could cost Harris County home- owners a reduction in property taxes, said one expert. Rice University health economist Vivian Ho said she's sure participation would have resulted in hospital districts lowering their rates because they'd caring for fewer uninsured patients.
A spokesman for the district called Ho's comment speculative.
At least one expert advised treating all the numbers with skepticism.
"This bill is very complicated, health care is very complicated," says University of Houston health law professor Seth Chandler. "Anyone who's sure what's going to happen under the new law is exaggerating their abilities."
Case in point: The federal government estimated that by 2012, 375,000 people would be enrolled in a new program that guarantees coverage to people with pre-existing health conditions. It projected the government's cost per person would be $12,000 to $13,000.
Instead, to date, fewer than 70,000 people are enrolled and the government cost per person is roughly double the estimate.
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